How does a French will affect UK assets?

John Kitching of French Law Consultancy answers a reader query

UK assets can partially be kept separate from a French will

Reader Question: I live in France and wish to make a French will. I have bank accounts in France and the UK and would like to leave differing sums of money to each of my three children. Will the UK account be affected?

As a French resident, French law and French inheritance tax applies to your worldwide estate.

French law would determine that each child inherits at least a quarter.

The remaining quarter can be left to whoever you want, so you could use it to increase the share of some of the children.

If that is not flexible enough, you may be able to use the law of England and Wales to meet your wishes, if you are of English/Welsh nationality.

A 2021 French law aims to prevent French residents using foreign law to disinherit children but it applies only to assets in France.

Read more: How does France’s recent inheritance law affecting foreign wills work?

So, you have freedom under English law to leave the UK accounts as you wish.

But if a child ends up with the less than their French ‘reserved’ portion the share of French assets could be rebalanced to rectify this.

Check your will carefully

You should ensure the will is correctly drafted and that it has addressed the inheritance tax implications.

It is important to note that an election of English law by a French resident does not mean the estate – including UK accounts – escapes French inheritance tax.

The UK bank accounts would also be declared on the inheritance tax form in the UK, but under the UK/France double taxation treaty of 21 June 1963 they should be taxed only in France, as the country of your domicile, and not in the UK.

There can sometimes be confusion over the correct ‘domicile’ for UK purposes, unless it is clear, perhaps from a declaration in the will, that you have abandoned your UK domicile of origin.

The French test for domicile is, however, more simple and is generally based on permanent habitual residence.

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